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The deficit reached $ 779 billion in fiscal 2018, up 17 percent from last year, according to final figures released Monday by the Treasury Department. This is the highest number since 2012, when the country was still spending heavily to stimulate an economy struggling to recover.
Government revenues remained stable this year compared to last year. Corporate tax collection decreased by $ 76 billion, or 22%, due to Republican-backed tax cuts. But this decline was more than offset by higher personal and self-employment tax revenues. The fiscal year ended on September 30th.
Spending increased 3% over the previous year, fueled in part by defense budget increases approved in September 2017 as part of an agreement between Republicans and Democrats to avoid closure. of the government. Social security and interest on the federal debt also contributed to this increase.
The Committee for a Responsible Federal Budget, a think tank that warns of the dangers of rising debt levels, said the deficit could reach $ 1 trillion as early as next year. That would still be less than the $ 1.4 trillion peak in 2009, but in a very different economy.
"People elected to Congress this year will face difficult and difficult choices to reduce debt and protect our country's social programs from insolvency," said Maya MacGuineas, the group's president. "This is no longer a problem for the future."
The White House has always defended its policies, saying the gaping gap is a reason to further reduce social programs to balance increases in the military budget. The Republican position under President Barack Obama is far removed when the House led by the GOP demanded about $ 1 trillion in 10-year budget cuts in exchange for an increase in the debt ceiling, resulting in years of painful automatic reductions in federal spending.
The White House budget director, Mick Mulvaney, a notorious debt hawk while he was a congressman, said the numbers underscored the need to cut spending.
"The president is very aware of the realities presented by our national debt," Mulvaney said in a statement. "The US's booming economy will lead to increased government revenue, an important step towards long-term fiscal sustainability, but this fiscal situation is a blunt warning to Congress about the terrible consequences of irresponsible and unnecessary spending. "
"People are going to want to say that the deficit is due to tax cuts.This is not the real story," Mnuchin told CNN. "In fact, we made a significant investment in the military, which is very, very important, and we had to increase non-military spending."
Few categories of non-military spending, however, have increased. Expenditures for the housing and urban development, transport, energy and education departments all declined, while health and social services and veterans increased slightly. The Department of Agriculture has seen a 7% increase over last year.
Also in June, the federal debt – which accumulates annual deficits over time – accounted for 78% of gross domestic product, its highest level since the Second World War. The updated figures were not immediately available Monday.
At the end of September, the House passed a bill that would extend personal tax cuts, which are expected to end in 2025, at a cost of $ 631 billion over 10 years.
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